Forbes Markets Rewind: Apple Shone While Amazon, Netflix Dragged

Apr 26 2014, 6:04am CDT | by

Stocks finished slightly in the red Friday after a number earnings reports from major companies ushered in big value swings especially in the tech sector. As had been the case in many recent weeks, the rise and fall of big tech stocks largely dictated the pulse of the market.

The Dow Jones industrial average was down 0.4% for the week, closing at 16,361 points, while the S&P 500 lost 0.1% to 1,863 points and the Nasdaq finished 0.7% in the red at 4,076 points.

Among the biggest losers of the week was Amazon.com. Despite announcing a content licensing deal with HBO Wednesday and posting better than anticipated revenue and profit numbers on Thursday, Amazon shares finished the week down 6.7%. The stock ticked up after its closing bell earnings report  but a sell-off began overnight and continued through much of the day Friday.  The stock ultimately shed 9.9% Friday and closed at $303.83. FORBES Markets Reporter Brian Solomon explained,

In what initially seemed like a gangbuster first quarter earnings report, Amazon showed nearly $20 billion in revenue, beating the analyst consensus estimate as sales rose 23% from last year. The company also eked out a small net income improvement — to $108 million from $82 million.

But Amazon’s guidance scared investors. While net sales are expected to grow between 15% and 26% compared to 2013, Amazon admitted they expect a return to the red — with an estimated operating loss between $455 million and $55 million.”

In a way Amazon’s performance in the late week was a replay of the drama Netflix suffered just a few days earlier. Shares of the video streaming company popped after it reported better than anticipated earnings Monday. In a letter to shareholders on the results Netflix CEO Reed Hastings and CFO David Wells declared war on HBO. Two days later HBO fired the first shot with its Amazon deal. The hit brought Netflix down and it did not recover by close Friday, ultimately finishing the week down 6.5% at $322.08

Wednesday Facebook, another fan favorite, reported $2.5 billion in revenue, $642 million in net income and earnings per share of 25 cents. All results were far ahead of the same period a year ago and a friendly beat over Wall Street analysts’ expectations. FORBES Tech Contributor Robert Hof reported that the surprisingly strong numbers were due to tremendous growth in mobile ad sales from 30% of total ad sales a year ago to 59% last quarter. Hof wrote,

The results seem almost superfluous in a quarter when Facebook spent $21 billion to buy text message firm WhatsApp and virtual reality startup Oculus VR–except that Facebook’s profits and growth are precisely what allows CEO Mark Zuckerberg to spend big on what he hopes will be the company’s future. The strong quarter should allow him to continue to do just that.”

Nevertheless the social network closed the week down 3.1% at $57.71. The stock opened in the green the morning after earnings before shedding a combined 9.3% on Thursday and Friday. Many market watchers believe those acquistions are a part of the problem, as they worry Instagram is not delivering on Facebook’s  $1 billion investment quickly enough.

Microsoft also closed the week down,but by only 0.4% at $39.91 with a modest earnings beat Thursday night pulling the company out of a mid-week slump. People seemed most impressed that new CEO Satya Nadella took part in the earning conference call, something predecessor Steve Ballmer avoided at all costs.

The real tech standout was Apple, which closed trading for the week up 8.7% at $571.94 after announcing strong earnings and plans to return $130 billion in cash to investors, as well as a 7-for-1 stock split. FORBES Markets Editor Steve Schaefer wrote,

The split does nothing to change the value of Apple’s shares — 7 shares at $75 apiece are worth the same amount of money as one share at $525 — but could make Apple shares more accessible to individual investors who can’t pony up hundreds of dollars for a single share of stock. That argument loses steam though when considering that retail brokerages like TD Ameritrade often report Apple is among the most widely-traded stocks by clients.”

Outside the tech sector airlines reported mixed earnings results and stock prices to match with Delta finishing the week up 7.5% at $36.o7 while United Continental was down 8.8% at $39.41. General Motors and Ford both finished the week lower after earnings, down 0.4% and 1.8% respectively. Visa shares also finished the week down 4.9% at $198.93 after the company reported weaker than anticipated earnings.

Next week is another busy one for corporate earnings reports with Twitter, LinkedIn, eBay, 3D Systems, Merck, MasterCard and others reporting.

Follow @samsharf

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

IPad Air Giveaway 2014 is Online
IPad Air Giveaway 2014 is Online
Our sister site I4U News is giving away a brand new iPad Air or if you can wait an iPad Air 2. This is an $499 value.
 
 
Your Parent Or Kid Moved In: Are You Covered?
A record 57 million Americans now live in multigenerational family households — double the number in 1980, according to a new Pew Research Center study. And I bet many of them have the wrong homeowner’s or renters...
 
 
Pandora Looks to Challenge Terrestrial Radio's Dominance in Cars
Pandora Media is one of the largest Internet radio providers in the U.S. with more than 75 million active users. While the company’s active user count has increased at a robust pace historically, it is likely to slow...
 
 
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
It’s January 2026. New York Yankees owner Hal Steinbrenner gets out of his driverless car and triumphantly marches before the gathered press to introduce his prized new free agent. It’s a record-breaking contract—over...
 
 
 

Latest from the Network

Heavy rain claims five lives in Karachi
Islamabad, Aug 2 (IANS) At least five people were killed Saturday in separate incidents in Karachi as heavy rains hit the city. A man in Metroville died as a wall collapsed on him, Dawn online reported. A woman and...
Read more on Politics Balla
 
UN continues to seek truce in Gaza
United Nations, Aug 2 (IANS) The UN continues to seek a halt to the Gaza violence despite the breakdown of a 72-hour humanitarian ceasefire. "The ceasefire seems to have lasted for maybe 90 minutes this morning, a...
Read more on Politics Balla
 
Delegates to be screened for Ebola at US-Africa summit
Washington, Aug 2 (IANS) US President Barack Obama has ordered compulsory screening of all the African delegates arriving in Washington for a summit for Ebola virus symptoms. The issue of Ebola "is something that we...
Read more on Business Balla
 
Man builds spaceship in his kid's bedroom!
New York, Aug 2 (IANS) Have you ever thought of building a spacecraft for your kid? Learn from this man who gifted his four-year-old son a NASA spaceship simulator - right in his bedroom! The spaceship has controls,...
Read more on Apple Balla
 
Pakistan summons Afghan envoy over border attacks
Islamabad, Aug 2 (IANS) Pakistan has summoned Afghanistan's charge d'affaires over another cross-border attack by terrorists, officials said. Pakistan's foreign ministry said a soldier was killed during "a sniper...
Read more on Politics Balla
 
Apple Prepared To Layoff 200 Beats Employees
The $3 billion Beats acquisition by Apple was certainly one of the most high profile purchases that the company has ever made. There have been over 25 other acquisitions in the past year, but nothing that matched this...
Read more on Apple Balla
 
Man Steals $300,000+ From Apple
Complex cyber attacks have become more and more common as years go by, but there is still a group of people who are having success with much more low-tech scams. That was the case with a man who recently obtained over $...
Read more on Apple Balla
 
Apple Launches Content Delivery Network
Apple is responsible for delivering a great deal of data to consumers, although they have traditionally relied on third party groups to handle the process. According to Frost & Sullivan, Apple has already worked out...
Read more on Apple Balla
 
Dunga denies Brazil blacklist
Rio de Janeiro, Aug 2 (IANS) Brazil coach Dunga has denied suggestions that striker Fred and goalkeeper Julio Cesar have been placed on a blacklist after the team's ignominious World Cup exit last month. Speaking...
Read more on Sport Balla
 
Lampard set for Manchester City loan
Washington, Aug 2 (IANS) Former Premier League side Chelsea star Frank Lampard will play for Manchester City under a loan deal from his new Major League Soccer Team New York City FC, media reports said. Lampard, who...
Read more on Sport Balla